A 17-year-old London schoolboy has sold his app company to the internet giant Yahoo for an estimated £18m. But he won't be moving to the company's California headquarters just yet … because he wants to finish his A-levels.

Nick D'Aloisio, from Wimbledon, south London, created the app, called Summly – which provides bite-sized summaries of content from news and other sites – a little over a year ago from his bedroom and now joins an elite group of teenagers who have become internet millionaires.

D'Aloisio, who is still too young to be a director of his own firm, said he had begun tinkering with apps for mobile devices as a hobby and had not expected to profit from it. The money from the sale of the business will go into a trust fund, although he said he does intend to get a new computer, as well as some new trainers. "I'll be staying in London," said D'Aloisio. "I want to finish my A-levels, and I couldn't really live on my own out there."

His mother, Diana D'Aloisio, appeared to still be somewhat in shock. "I knew he was a little out of the box, but I didn't expect it to happen all of a sudden like this," she said. "From a young age he displayed abilities in technologies I frankly didn't understand. He was doing 3D programming, and we bought him a book called C Programming For Dummies. My husband and I just used our computers for work, he was doing totally different stuff."

The price tag is understood to be £18m, 90% in cash and 10% in Yahoo shares, though other reports suggested the total could be up to £40m. Neither D'Aloisio nor Yahoo would confirm the details of the deal.

D'Aloisio began using computers at the age of nine, making films, and then moved to programming at the age of 12 when Apple opened its App Store for the iPhone. The teenager's success comes less than five years after he released his first app, called Fingermill, an onscreen virtual treadmill for fingers.

Summly, launched in November 2012, won one of Apple's best apps of 2012 awards. The app produces summarised versions of news stories, with the number of words tailored to fit into a single smartphone screen; so far 90m summaries have been read, the company says. But it will not be available much longer – as part of the acquisition, the app will be shut down and integrated into Yahoo's business as it tries to remould itself for the fast-growing mobile market.

D'Aloisio, whose father is a commodities trader and mother a lawyer and director of the company, is taking maths and philosophy A-levels at King's College school, and trying to decide whether the third one should be physics or history. "He still wants to go to Oxford University," his mother said. "He's just a normal kid really. When he's at home, he tidies his room. He's quite neat — very organised, in fact."

After the takeover is finalised, he will work in Yahoo's Soho offices by day, where he will be the company's youngest employee, and continue studying for his A-levels in the evening.

D'Aloisio got the idea for the app in 2011 when revising for his exams and finding himself frustrated with web pages that broadly repeated the same content. He produced an early version of Summly, called Trimit, which was downloaded more than 200,000 times.

The publicity from the Apple award attracted the attention of Hong Kong investor Li Ka-shing and his venture capital firm, Horizon Ventures. External investors – others are said to include actors Stephen Fry and Ashton Kutcher and artist Yoko Ono – bought a third of the company's share capital, according to documents filed at Companies House last October. The rest is owned by D'Aloisio's mother.

It was those investors who brought in a savvy team of directors, engineers, business managers and PR professionals who have been working to turn Summly into a potential world-beater, including older staff such as the chief technology officer, Eugene Ciurana, who boasts 20 years' experience in the technology business, and the head of R&D, Inderjeet Mani. Both of them will be moving to Sunnyvale, close to San Francisco.

Yahoo is one of the oldest names on the web but has struggled to keep pace with more nimble rivals. Chief executive Marissa Mayer is trying to refocus the business around mobile technology. Sites such as Facebook and Twitter are now more used on smartphones than on the desktop and she has made a string of small acquisitions.

D'Aloisio told the Guardian that it had not been the price that had determined who he would sell to after months of negotiation.

"It was spending time on the campus. Marissa Mayer wants to reinvent the company, and they have a big opportunity. They have a really strong focus on mobile and taking daily habits and reinventing them for a mobile device. I can't wait to work on that level."

Other web youth sensations

Alex Tew In 2005 Tew, 21, from Swindon, was looking for a way to pay his student loan from the University of Nottingham. He came up with the Million Dollar Home Page: sell a million pixels at a dollar (or so) each. Advertisers bought on the guarantee that the site would stay up for at least five years. Hundreds of others tried (and failed) the same idea in his wake. It's still going today. Tew, meanwhile, has moved to San Francisco where he is head of calm.com, which offers online relaxation sessions.

Tom Hadfield In 1994 Hadfield, 12, and his father Greg created Soccernet – a sports internet company – at a time when most people in the UK hadn't even heard of the internet, and fewer still were online. Five years later they sold a 60% stake to Disney's ESPN for £15m. They then set up Schoolsnet, an education website, which they still control.

Christian Owens In 2008, aged 14, Owens, from Corby, began Mac Bundle Box, selling discounted bundles of software for Apple computers; he said it took £700,000 in revenue. By 2010 he had set up an internet advertising network called Branchr and was claiming to be an internet millionaire.

Mark Zuckerberg In 2004, aged 19 and studying at Harvard University, Zuckerberg created "Facemash to let users vote on which of two students was the more attractive. He then developed TheFacebook.com, aimed only at US colleges; new colleges were only added once a certain level of demand was reached. That became Facebook, which opened to the wider world, went public in 2012 and is worth about $14bn (£9.2bn).

Shawn Fanning In 1999 Fanning, 18, released a public version of a program called Napster, which helped people share music between computers. Use exploded at Northeastern University, in Boston, Massachusetts, where he was studying, and soon Napster the company was shaking up the music business, which responded with lawsuits. Fanning became a millionaire, but left Napster in May 2002. He now works at Silicon Valley startup Path.com.